Huahai Pharmaceutical: Q1 deduction of non-net profit pre-cut by 15%-25%, unable to judge the impact of the valsartan incident

The stock crashed and fell for two consecutive days.

The stock price continued to fall and the company responded urgently

After the stock price fell limit for two consecutive days on April 7th and 8th, Huahai Pharmaceuticals issued an announcement stating that its stock had a cumulative deviation of 20% in the three consecutive trading days on April 6th, 7th, and 8th.

In addition, the controlling shareholder and actual controller Chen Baohua stated in the reply to the inquiry that, except for the related matters that have been disclosed, there is no significant information that should be disclosed but not disclosed that may have a significant impact on the trading price of your company’s stock, including but not Limited to major asset restructuring, share issuance, acquisition, debt restructuring, business restructuring, asset divestiture, asset injection, share repurchase, equity incentives, bankruptcy reorganization, major business cooperation, and the introduction of strategic investors.

However, today (April 9) Huahai Pharmaceutical's downward trend has not been reversed.

News of the valsartan incident has occurred again, and many lawsuits are still in progress

Huahai Pharmaceutical also responded to the news that "the company valsartan US patients claimed 800 million yuan, and the lawsuit failed" in the stock bar, saying, "The company immediately carried out a serious verification after paying attention to this news.

The valsartan incident occurred on July 7, 2018.

Subsequently, EDQM (European Drug Quality Administration) suspended the CEP (European Pharmacopoeia Certificate of Adaptation) certificate of Huahai Pharmaceutical's valsartan API.

On October 8, 2018, Huahai Pharmaceutical once again announced that some consumers in the US market had previously found extremely small amounts of genotoxic impurities (NDMA) in the unknown impurities of valsartan raw materials, and believed that Huahai Pharmaceuticals and its subordinates Subsidiaries, Huahai America, Plindstone Pharmaceuticals, and Shouke Health America, have committed fraudulent concealment, breach of contract, negligence, and unjust enrichment, and filed suits in the court.

On December 18, 2019, Huahai Pharmaceutical issued an announcement regarding the restoration of the European Pharmacopoeia Adaptability (CEP) certificate for valsartan API, which marked the end of the suspension of the CEP certificate for valsartan API.

On August 31, 2020, Huahai Pharmaceutical disclosed the progress of litigation in the United States and stated that most of the company's valsartan-related litigation cases have been consolidated into one case.

The outcome of the case still needs to be waited.

Affected by FDA bans and other factors, profits in the first quarter of 2021 will drop by 15%~25%

Huahai Pharmaceutical's performance in the first quarter of 2021 is not very optimistic.

Regarding the main reasons for the changes in the performance of the current period, the announcement pointed out that in the first quarter of 2021, Huahai Pharmaceuticals sold 3.

Looking back at its 2020 performance, the company achieved revenue of 6.

According to the announcement, the main reasons for the pre-increasing performance in this period are: 1.

As mentioned above, the successful bidding of centralized procurement has brought market growth to Huahai Pharmaceutical.

At the end of December 2019, in the second round of national procurement, Huahai Pharmaceutical won the bid for Amrisentan tablets and Donepezil hydrochloride tablets.
In August 2020, in the third batch of centralized procurement, Huahai Pharmaceuticals won the bid for three varieties of Valsartan Tablets, Olanzapine Orally Disintegrating Tablets and Sertraline Hydrochloride Tablets.
Under the influence of this, in the third quarter of 2020, its revenue increased by 21.
41% year-on-year to 4.
87 billion yuan, and non-net profit increased by 109.
55% year-on-year to 781 million yuan.
Revenue and profits were both bumper.

reference:

The Paper: Announcement after the plunge of Huahai Pharmaceutical: It is temporarily unable to accurately determine the impact of litigation incidents and arbitration incidents

International Finance News: 377 funds' heavy stocks suddenly plummeted! The pharmaceutical company issued 5 announcements to clarify doubts after two limit values